Quicker Development: Hindustan Aeronautics will have to speed development of its Light Utility Helicopter effort because a proposed foreign acquisition may be canceled. (HAL)

NEW DELHI — The Indian Ministry of Defence has ordered state-owned Hindustan Aeronautics Ltd. (HAL) to accelerate development of its indigenous Light Utility Helicopter (LUH) program because fraud charges may derail the procurement of 197 helos from overseas, said an MoD source.

While no decision has yet been taken on canceling the 2009 tender, in which Eurocopter (Now Airbus Helicopters) and Kamov of Russia are competing, the source said, India’s anti-fraud agency, the Central Bureau of Investigation (CBI), formally leveled charges against a serving Indian Army officer for alleged involvement in manipulating the trial report of the LUH procurement. Charges were made last week.

The officer’s alleged involvement came to light last year when an investigating team traveled to Italy to probe alleged corrupt practices by AgustaWestland to win a contract to provide 12 AW101 helicopters. The team discovered a document in which the Indian Army officer had allegedly offered AgustaWestland to turn the LUH contract in their favor. However, AgustaWestland was eliminated in the first round of procurement in the technical evaluation stage.

Eurocopter and Kamov executives were unavailable for comments.

Politics is also playing a role because general elections are slotted for May and the ruling United Progressive Alliance government will not want to be viewed as ignoring corruption, said Nitin Mehta, new Delhi based defense analyst.

The $500 million LUH tender was issued in 2009 to Eurocopter for its Fennec AS550 C3 helicopter, to AgustaWestland for the AW119 and Kamov for the 226T helicopter.

The MoD source said that if the tender is canceled, the order for 197 helicopters will be given to HAL, which is developing an LUH for the Indian Army and Air Force.

HAL’s LUH, however, is still in initial development and the Army urgently needs the aircraft to ferry troops and material to battlefields at high altitudes in northern India bordering Pakistan and China. Currently, the Army and Air Force are using Cheetah and Chetak helicopters license-produced by HAL for logistic support at altitudes of more than 20,000 feet, where the military needs to operate at the Siachen glacier and the upper reaches of the Himalayas bordering China.

The Cheetahs and Chetaks have outlived their life expectancy and the Army and Air Force have been demanding replacements for more than a decade.

An Army official said cancellation of the LUH tender would be a severe blow to Army logistics operations, but added that HAL’s record in delivering equipment is unsatisfactory and should not be counted on as the sole supplier of LUH resources. The LUH should be procured as quickly as possible on a government-to-government basis if the tender is canceled, the official said.

Status of LUH

HAL officials said they will achieve initial operational clearance of the LUH by the end of 2015 and begin serial production by mid-2017. A contract for 187 light utility helicopters is expected from MoD by the end of the month, a HAL official said, and the official claimed the company’s LUH would be 10 percent cheaper than that of Eurocopter or Kamov.

The single-engine LUH would be powered by a French-made Turbomecca engine. Of those 187 helicopters, 127 would go to the Army and 61 for the Air Force.

“The development of LUH has progressed with the completion of three milestones, including the configuration freeze, design freeze, and transmission and rotor design. And currently, the detail design and analysis milestone and ground test vehicle run milestones are in progress,” said an official of HAL.

The helicopters will be used for multiple missions for both services, including reconnaissance and surveillance; directing artillery fire; transporting small numbers of troops; nuclear, biological and chemical monitoring; casualty evacuation; and airborne forward air control.

LUH Tender

If canceled, this would mark the second time the program was halted. In 2007, Eurocopter, with its Fennec helicopter, was on the verge of being declared the winner when US-based Bell Helicopters complained to the MoD about a lack of transparency in the procurement process and that tender was canceled in 2008.

In the recent competition, an Army source said there have been issues with the trials of the two competitors. The Airbus Helicopters candidate has had some problems operating at high altitudes, and the Army wants it to be able to accommodate a second stretcher, which will require structural modifications, added the source.

Kamov has offered a choice of two Western engines, but the engines will require re-certification.